Group strategy

Datatec's strategy is to deliver long-term, sustainable and above-average returns to shareholders through portfolio management and the development of its principal operating divisions – providing technology solutions and services to targeted customers in identified markets.

The Group provides leadership and sets the direction and strategy for each business, together with divisional management. It identifies potential areas for growth and supports the realisation of growth either organically or through acquisition by allocating capital and financing.

STRATEGIC PRIORITIES

DATATEC GROUP

Improve accounts receivables and net working capital in Westcon International

Consolidate Logicalis' position through organic and inorganic actions

Continue to look for optimum value realisation opportunities

2

2 INTEGRATION AND MANAGED SERVICES

LOGICALIS

Continue to focus on improving the services and annuity revenue mix

Focus on cost reduction activities in legacy areas of the business

Continue the roll out of the common services platform to new countries as an enabler for further efficiencies

Seek further acquisitions to boost market share in existing territories and to leverage Logicalis' capabilities in emerging technologies

3

3 TECHNOLOGY DISTRIBUTION

WESTCON INTERNATIONAL

Focus on revenue growth, margin improvement and profitability

Working capital normalisation and improving cash flow

Africa transformation, transition from loss to profit

Leverage technology automation around SAP and customer-supplier tools

Reverse BPO to improve customer service and transaction execution

Shared services centres in SA and Philippines for EMEA and Asia-Pacific

Continued focus on Comstor-Cisco differentiation

Expand security portfolio in emerging technologies

Deployment of digital distribution technology – Cloud/aaS enabled ERP

Reduce ongoing central costs to below 1% of revenue

4

4 CONSULTING AND FINANCIAL SERVICES

ANALYSYS MASON

Improve scale

Grow research practice

Customer diversified

DATATEC FINANCIAL SERVICES

Drive penetration and revenue growth

Expand geographical coverage

Increase product efficiencies

Business model

The Group has a decentralised business model with three principal operating divisions (Integration and Managed Services – Logicalis; Technology Distribution – Westcon International; Consulting and Financial Services – Analysys Mason and Datatec Financial Services) that are managed as standalone businesses.

The diagram below illustrates Datatec’s role in the ICT supply chain. The spread of business activities across distribution, integration and consulting provides the Group with multiple entry points to the global market, and acts as a defensive measure against adversity in any one vendor, geography or technology.

The Group’s operating divisions act as industry
intermediaries in the ICT supply chain, enabling IT users
to gain access to a broad range of advanced technology
solutions and professional services in order to implement
and maintain secure complex IT networking, unified
communication, cloud and data centre infrastructures.

The Group has strategic partnerships with leading
technology vendors who outsource specific elements of the
supply chain such as distribution, logistics and marketing to
value-added distributors like Westcon-Comstor. In addition,
vendors also rely on resellers and system integrators like
Logicalis to address the highly fragmented end-user
customer base who require technical expertise to identify
and install complex systems, critical solutions and managed
services. The Group’s consulting and research division not
only consults to vendors but also to public and commercial
enterprise customers, telecoms, media and technology
providers. Datatec Financial Services provides financial
solutions and services to end-user customers, partners
and manufacturers of Datatec’s operating divisions.

The business model empowers its divisional management
teams to make operational decisions that are best suited to
their individual operating needs but within a strategic
operating and financial framework set by the Group. The
pure-play nature of each operating division also facilitates
enhanced operational and financial performance as well as
the ability to react faster to technology changes.

ICT supply chain overview

The diagram above illustrates Datatec’s
role in the ICT supply chain. The spread
of business activities across distribution,
integration, and consulting and financial
services provides the Group with
multiple entry points to the global
market, and acts as a defensive
measure against adversity in any one
vendor, geography or technology.

The Group’s operating divisions act as
industry intermediaries in the ICT supply
chain, enabling IT users to gain access
to a broad range of advanced
technology solutions and professional
services in order to implement and
maintain secure complex IT networking,
unified communication, cloud and data
centre infrastructures.

The Group has strategic partnerships
with leading technology vendors who
outsource specific elements of the
supply chain such as distribution,
logistics and marketing to value-added
distributors like Westcon International
In addition, vendors also rely on resellers
and system integrators like Logicalis to
address the highly fragmented end-user
customer base who require technical
expertise to identify and install complex
systems, critical solutions and managed
services. The Group’s consulting
subsidiary, Analysys Mason, not only
consults to vendors but also to public
and commercial enterprise customers
and telecoms, media and technology
providers.

The business model empowers its
divisional management teams to make
operational decisions that are best
suited to their individual operating needs
but within a strategic operating and
financial framework set by the Group.
The pure-play nature of each operating
division also facilitates enhanced
operational and financial performance as
well as the ability to react faster to
technology changes.